Since its introduction in the early 1960s, the EU Common Agricultural Policy (CAP) has demonstrated a capacity to adapt and change in the face of new challenges. The reformed CAP, under AGENDA 2000, encourages more environmentally friendly farming practices. In the context of their rural development plans, Member States are required to link policies on agriculture with protection of the environment and to ensure that farmers meet environmental standards. Additionally, Member States should maintain and restore the quality of both their aquatic and adjacent terrestrial ecosystems according to the Directive 2000/60/EU, 'Establishing a framework for Community Action in the field of Water Policy'. Within this framework, agri-environmental indicators play an important role in planning and implementing CAP guidelines. However, selection and use of the proper indicators remains unresolved, considering that ecosystem processes are complex and interactions in most cases not obvious. This paper proposes a methodology for assessing the environmental state and impacts of current land use and management when implementing agri-environmental measures of CAP. The proposed methodology includes a modified Driving forces-Pressures-Impacts-Responses (DPSIR) framework, identification of Zones of Specific Functional Interest (ZSFI), and criteria for selecting agri-environmental indicators, which assess the functional performance of each zone and meet existing legislation. The Mygdonia Watershed (Greece) is an example where through use of both the appropriate Minimum Data Set of agri-environmental indicators at the identified zones and the proposed modified DPSIR, the functioning performance of each ZSFI can be assessed to evaluate the applied agri-environmental measures. (C) 2004 Published by Elsevier Ltd.
